Schools Eye Future Costs

Educators are using a business concept to forecast the costs of technology.

School leaders across the country have made multimillion-dollar investments in technology, but the costs of maintaining and supporting computers have left many districts searching for long-term financial solutions.

“People are beginning to understand that there’s an ongoing cost with the purchase of technology,” says Ed Zaiontz, the executive director of information services for the 36,500-student Round Rock Independent School District, located just north of Austin, Texas. “Just because you paid to buy it doesn’t mean there aren’t [long-term] costs that go with it.”

Having a well-developed approach to technology planning and spending has become an important goal for Zaiontz, whose district began heavily funding school technology in the late 1990s. In 1997, taxpayers approved a $99 million bond that earmarked $22 million for technology purchases.

The Round Rock district used the money to build internal computer networks within buildings as well as install Internet access in classrooms and administrative offices and put telephones in classrooms. It also paid for the purchase of technologies that would allow educators and students to send voice and video clips over the Internet.

In 2000, a second, $199 million bond—with $38 million set aside specifically for educational technology—helped the district buy more computers and install a wide area network, which connects multiple buildings to one another.

The district now must maintain more than 17,000 computers, a number with big implications for the costs of educational technology in the coming years.

To address those long-term costs, district technology directors, like Zaiontz, and state officials are embracing a business-world concept known as “total cost of ownership,” or TCO. That financial-planning model helps organizations measure and manage the direct and indirect costs of acquiring, maintaining, and using technology.

Used by the technology industry since the 1980s, the model takes key information such as salaries, hardware and software costs, equipment-supply and -repair expenses, and staff-training costs, and plugs them into a software program that calculates the long-term costs of technology programs. Organizations, including school districts, can then identify areas where funding is falling short, places where costs can be reduced, and areas where more staff support is needed.

‘Slow to Pick Up’

The idea of using a private-industry concept like “total cost of ownership” in schools didn’t emerge until the late 1990s. Initial funding for educational technology, several experts point out, was focused on getting computers into classrooms. TCO analysis was rebuffed, they say, because schools didn’t understand what it was. Even administrators who understood the concept believed that it wasn’t the best solution for education. They felt that most of the TCO models presented by technology vendors at the time were biased toward helping companies make more money, rather than ensuring that schools were making sound decisions that would work well—and not cost too much—in the long run.

“K-12 was slow to pick up on [long-term planning],” says Rich Kaestner, the TCO project director for the Consortium for School Networking, or CoSN, a Washington-based nonprofit organization that advocates the use of technology in education. “Part of the reason being that the computer environment up until the 1990s was fairly unsophisticated. But as K-12 got into [using larger computer networks], the whole need to look at costs became more paramount.”

By 2000, school district computer networks had grown significantly, and districts—weighed down by a hodgepodge of equipment, aging networks, and understaffed technology departments—were looking for better ways to spend their technology dollars.

In response, organizations such as CoSN and the Appalachia Educational Laboratory, a nonprofit organization in Charleston, W.Va., that researches school improvement, began developing online tools designed to help districts gather and analyze their own TCO data.

In Texas, Zaiontz became one of the first to begin exploring TCO models when his district took part in a 2003 study sponsored by CoSN and Gartner, an information-technology research firm based in Stamford, Conn., that promotes TCO analysis in the industry.

“We actually thought we were doing pretty well [at that time] in terms of [spending],” says Zaiontz. “But the question was, could we do better?”

By applying the TCO concepts supplied through CoSN’s tool, Zaiontz discovered that the Round Rock district could, indeed, do better. The financial analysis revealed that while a majority of the district’s computers were less than 3 years old, nearly 60 percent of its 192 network servers, which supported those computers, were older or outdated.

Eventually, aging networks can lead to major problems, according to experts, because older machines not only tend to break down more often, but also create compatibility problems as newer technology is installed. Those problems can trigger a domino effect, in which support costs rise and staff hours increase to address a growing number of repairs and computer-troubleshooting incidents.

The TCO analysis in the Round Rock district also found that its 3,300 ink-jet printers, which had been bought because of their low initial costs, were more expensive to maintain than laser printers because they used more ink. In fact, ink-jet replacement cartridges were costing the district nearly $250,000 a year.

“Wow. That’s what we said. Wow,” recalls Zaiontz.

‘Handwriting on the Wall’

For Sally J. Bair, the technology facilitator for the 2,450-student Northern Lebanon district in Fredericksburg, Pa., the data provided using TCO has helped her communicate better with school leaders.

Among the many problems she faced was finding the time for staff members to be trained in new technologies, and ensuring technical support for an ever-expanding, year-round computer system that operates during the school year and for summer academies.

“I know of no moment to pause,” Bair says. “There’s always more coming down the pipeline. We were seeing more networks, more switches, desktops, laptops. [Information technology] is expected to know everything, but we don’t know everything about every technology. You’re in basic survival mode out here in the trench.”

Over the years, the influx of technology in Bair’s district demanded more staff support. But no matter how hard she tried to convince the school board of that need, she recalls, she couldn’t get the board to hire more staff—that is, until the TCO data persuaded the members to authorize that step. After reviewing the CoSN data, the board allowed Bair to hire two additional staff members.

Similar results have materialized in other districts that applied TCO. The data gathered for the analytical tool has helped some schools standardize their computer platforms, monitor the traffic on their networks, assess the age and replacement schedules for their computers, and reallocate money for support and repair costs.

‘Accountability for [technology spending] is going to be ramped up more and more.’

Sally J. Bair

Technology Facilitator

Northern Lebanon District

Fredericksburg, Pa.

But not all districts have the time or the resources to gather the data required for a TCO analysis.

“I should find the time to do that, but you get busy and my time is limited,” says Craig Andrews, the director of technology for the 4,100-student Alexandria, Mo., district. He would like to establish a better technology-planning and computer-replacement schedule for his district, which now keeps its computers for seven or eight years and is beginning to experience infrastructure problems because of its aging servers and network.

To make matters worse, a local educational technology levy proposed in 2004, which would have brought in $500,000 over the next 10 years to help replace school district computer hardware, failed to receive voter approval.

Experts acknowledge that finding the time to gather TCO data is the biggest obstacle facing the 1,300 school districts that have signed up to use CoSN’s tool. To address the problem, the organization plans to add reasonable “default” values that could give schools a rudimentary idea of what their costs might be.

But Kaestner of CoSN has mixed emotions about offering what he sees as “a lazy way out.” Schools learn as much about their technology spending from gathering the data themselves as they do from analyzing the results, he argues.

“Very few IT directors have all this [information] at their fingertips,” he says. “So the process and the results are eye-openers.”

What’s more, experts say, using TCO methods of analysis is something more schools will need to do in light of increasing demands by states and the federal government for schools to provide evidence of technology’s impact on student achievement.

“Accountability [for technology spending] is going to be ramped up more and more,” says Bair. “That’s the handwriting on the wall.”

Weighing Benefits and Drawbacks

Most technology experts agree that schools should think ahead and develop long-term financial plans. But some observers warn that schools need to approach online TCO calculators with caution. Before using an online tool, they say, schools need to educate themselves on the TCO concept first, so they have a firm grasp of how the approach can be applied to schools.

“The concept [of TCO] is very smart,” says Jamie McKenzie, the editor of From Now On, an online educational technology journal.

But TCO models such as those offered by the Appalachia Educational Laboratory and CoSN are flawed, he argues, because they focus primarily on the costs of hardware, software, and technical training, but are “very thin” on teacher professional development, program building, and organizational issues—which can amount to 30 percent to 40 percent of technology costs. Applying business models such as CoSN’s will make a school network hum, McKenzie says, but he emphasizes that if schools don’t provide teachers with a means of applying technology to what they teach, having a good network won’t improve student achievement.

Kaestner of CoSN responds that professional development is measured by the tool’s calculations, but he acknowledges that the current breakdown of that training isn’t as detailed as critics suggest it should be. However, the organization is working toward a “total value of opportunity,” or TVO, model that will look at the value side of the technology equation to help schools measure their return on investment.

Still, there’s no way to predict every twist and turn technology will take, because it changes so fast, says Terry Tamblyn, the vice president for educational services at Bridger, a technology company based in Darien, Ill., that designs and maintains networks for schools.

He says districts can give themselves a leg up, though, by building strong underlying technology infrastructures and efficient networks, not jumping at every frill or new trend, and forging strong lines of communication between district technology and curriculum directors.

He also recommends that schools consider outsourcing their technology needs and leasing rather than buying their computers. Leasing ensures that the computers are replaced on a regular schedule, and that schools don’t have to worry about recycling them.

Plus, technology will be cheap enough in 10 years, he says, to allow students to bring their own personal devices to school, eliminating the need for so many school computers.

“There has to be a long-term vision,” says Tamblyn. “I don’t think there are very many schools out there who know everything they’re spending.